(Kitco News) - Gold prices are trading near session highs after U.S. headline consumer prices cooled more than expected in July, boosting hopes for a significant September rate cut from the Federal Reserve.
The Consumer Price Index (CPI) rose 0.2% last month after June’s -0.1% decline, the U.S. Bureau of Labor Statistics said on Wednesday. The latest inflation data was in line with expectations, as economists were looking for a 0.2% increase.
The report said that in the last 12 months to July, headline inflation rose 2.9%, beating expectations for a 3.0% reading and also below June’s 3.0% print.
Core CPI, which strips out volatile food and energy prices, increased 0.2% in July against expectations for a 0.2% reading and June’s 0.1% increase.
The report said that annual core inflation rose 3.2% in July, also in line with economists’ expectations and below the 3.3% reading from the prior month.
The gold market whipsawed following the latest inflation data. Spot gold immediately turned negative on the session in the minutes following the CPI release, before rocketing back above $2,375 moments later. Spot gold last traded at $2,472.54 per ounce for a gain of 0.31% on the daily chart.
